On August 23, 2013, Meggitt-USA, Inc. (Meggitt),
a Delaware corporation, agreed to a $25 million penalty to settle 67 charges of the Arms
Export Control Act (AECA) and the International Traffic in Arms Regulations
(ITAR) violations in connection with the unauthorized export of defense
articles, including technical data, the unauthorized provision of defense
services, violation of the terms of provisos or other limitations of license
authorizations, and the failure to maintain specific records involving
ITAR-controlled transactions.

Over the last several
years, Meggitt and its various subsidiaries submitted multiple disclosures to
the Department of State involving hundreds of potential civil violations of the
AECA and ITAR beginning in the mid-1990s. The majority of these violations were
uncovered by Meggitt during a post-acquisition review of new companies.

Under the terms of the
30-month consent agreement with the Department, Meggit was assessed a civil
penalty of $25 million, of which $3 million will be paid in installments and
the remainder suspended on the condition the Department approves expenditures
for self-initiated, pre-consent agreement remedial compliance measures and
consent agreement-authorized remedial compliance costs. Meggitt cooperated with
Department reviews, and implemented or has planned extensive remedial measures
throughout its subsidiaries. For these reasons, the Department determined that
an administrative debarment or suspension of Meggitt was not appropriate at
this time.